Income Taxes

3 Months Ended

Mar. 31, 2026

Income Taxes

Income Taxes

Note 13.  Income Taxes

Income tax expense was $1.4 million for the three months ended March 31, 2026, compared to $4.5 million for the three months ended March 31, 2025. The $3.1 million decrease was primarily due to the decrease in pre-tax book income. The reported effective tax rate (“ETR”) for the three months ended March 31, 2026 was 13.3% compared to 13.6% for the three months ended March 31, 2025. The ETR for the three months ended March 31, 2026 was less than the U.S. statutory rate of 21% primarily attributable to the Foreign Derived Intangible Income deduction and Federal research and development tax credits.

On July 4, 2025, legislation known as the One Big Beautiful Bill Act (OBBBA) was signed into law. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act. The legislation has multiple effective dates, with certain provisions effective in 2025 and others being implemented through 2027. The impacts of the portions of the OBBBA that have come into effect are reflected in our results for the quarter ended March 31, 2026. We will continue to evaluate the full impact of these legislative changes as additional guidance becomes available.